Despite mediocre interest rates at the moment, an online high yield savings account is still the best place to put money you may need for emergencies or other purchases in the near term (one year or less). At the moment, I recommend Ally Bank. More on that below, but here are the latest competitive rates:
Back when I started this blog in 2006, the concept of an “online” bank accounts was still new-ish. ING Direct was the market leader, but was starting to get a few competitors. And that competition meant crazy interest rates—up to 5% or so—on FDIC-insured savings accounts.
Today, there are dozens of online savings banks and interest rates at all of them hover around 1%. Most don’t require a minimum opening deposit or balance to earn the rate, so at the end of the day, comparing these accounts is difficult. They’re not cars with a million bells and whistles, they’re bank accounts. They are the best place to put cash you could need in an emergency or plan to spend in the next year.
There are three banks I like because I and/or other bloggers have had excellent experiences saving with them: Ally Bank, FNBO Direct, and ING. (Full disclosure, I do have affiliate relationships with these banks, as well as several others.) Right now, if I were opening a new account, I would choose Ally Bank. Although not the rate leader, Ally pays a competitive interest rate, has invested big money in market-leading customer service, and—perhaps most importantly—it’s committed to growing as an online bank. Click here to learn more about Ally Bank or open an account now.
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